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11 Dec 2002 : Column 308—continued

Ms Stuart: Will the right hon. Gentleman give way?

Mr. Ancram: I am going to move on now, because I am conscious of the time.

This is a particularly opportune time for the House to debate European affairs more generally than was possible in last week's debate. It is good to see the hon. Member for Birmingham, Edgbaston (Ms Stuart) in her seat once again, as it is to see my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). They represent us on the Convention and were able to enlighten us in last week's debate on the direction in which Europe is moving.

Ms Stuart: This is a pertinent question, because quite a number of people on the Convention are asking for a Europe-wide referendum on the constitution. If there were a call for a referendum from Brussels, would the right hon. Gentleman support it?

Mr. Ancram: My concern is that the sovereignty of this country should not be sold out without the consent of the British people. If the constitution likely to emerge from the Convention were to propose such a sell-out—last week's debate suggested that it will—the House should not ratify it without the democratic consent of the British people. That is a very simple principle—and, I believe, a correct one—that will be supported by many people in this country.

Mr. Kevan Jones (North Durham): Will the right hon. Gentleman give way?

Mr. Ancram: I am going to move on, now. I have made our position on a referendum clear, and that is the position from which we will move forward.

The European Council meeting at Copenhagen will be of particular importance, as the Foreign Secretary said. We hope that four matters will be successfully taken forward from it. We look forward to the conclusion of negotiations on enlargement; we hope to hear something about reforming the common agricultural policy, whether or not the issue is formally on the agenda; we expect progress to be made on Turkey's path to EU membership; and we look forward to an acceptable resolution of the problems in Cyprus.

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We support Turkey's membership of the European Union, but it raises an old question: what is Europe, and where does it end? The time has come for a wide debate, both in this country and across Europe. At the moment, we are talking about Turkey, but in the future we may also be talking about Ukraine or Belarus. We need to explore where we envisage the European Union ending and what we believe constitutes Europe. I believe that Turkey belongs in Europe. Its geography may be ambiguous, but its values are becoming increasingly democratic. Its membership will allow the European Union to show the Muslim world that it does not reject it as alien, that democracy and Islam are compatible, and that a country can be both European and Muslim. The Foreign Secretary was also suggesting that, and I believe that this would be a useful gain.

Britain and its partners in the European Union would do well to set a date at Copenhagen for the commencement of negotiations on Turkey's membership of the EU. It is important to welcome Turkey into the EU because it will help to underpin a stable settlement in Cyprus. Kofi Annan's proposals form a sound basis for a settlement that is fair to both communities, and I am pleased that the new Turkish Government's response has been encouraging, although the response of the Turkish Cypriot Government has been less so.

The island's division is one of Europe's unhealed wounds, and the impetus of EU enlargement and the United Nations plan give us the best chance in a generation to heal it. Having been involved in attempts at conciliation in the past, however, I would say to the Foreign Secretary that, in reaching an agreement, it will be important not to leave behind too many unresolved problems that could surface later to undermine a settlement. I hope that the Foreign Secretary would agree that progress on Cyprus could be faster if the Turkish Government were given to understand that Turkey would progress faster to EU membership if the Cyprus problem were solved. It would be a tragedy if this unique opportunity to unite the island were missed.

Last month also saw the expansion of NATO. It is a great tribute to the harmonious relations that exist between the United States, western Europe and Russia that we have been able to welcome Estonia, Latvia, Lithuania, Romania and Bulgaria into the north Atlantic alliance. That showed that making Russia a co-operative ally—as we have done over the last few months—in both EU and NATO enlargement has been helpful. The Berlin wall was not torn down only for another wall to be set up further east. At the same time, however, we must understand the difficult relationship that some of Russia's neighbours have, and may continue to have, with her.

That is why it is vital that we get right the solution to the problem of Kaliningrad. The only way to guarantee that it will not become a permanent source of tension is to reach a fair settlement in which neither Russia nor Lithuania feels that its sovereignty has been compromised. Much progress has been made on this issue, but I hope that the Prime Minister and the Foreign Secretary, as relatively disinterested parties, will do their best in Copenhagen to ensure that a lasting settlement is achieved.

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The 10 countries due to join the EU in 2004 are looking, above all, for two things from EU membership—prosperity and stability—but they will get them only in a European Union that is working to achieve them. The Lisbon process set out fine objectives, but in too many ways the EU has failed to deliver. The liberalisation of the energy market has been delayed, a single market in financial services is bogged down, and very little progress has been made in cutting youth unemployment. With the eurozone's main economy, Germany, in danger of recession, there must be more determination to move forward on the economic agenda. More red tape on business and more social directives only keep European economies stagnant. The deputy director general of the Confederation of British Industry told the Financial Times that, since Lisbon,

It is telling that, of the CBI's 10 most unpopular regulations, seven are EU directives. We must address that problem. In conversations that I have had with people around Europe, I have found that many who may fundamentally disagree with me about the future shape of Europe are as concerned as I am about the nature of some of the directives that are being issued.

A good example is the atypical workers directive, and the CBI has predicted that it may cost 160,000 British jobs alone. The directive is a fine example of how we have failed to fight our corner successfully in Europe, and have let down our partners by failing to win the arguments on economic liberalisation. The directive is a classic piece of Brussels bureaucracy and Labour MEPs supported it against the Government's wishes, so far as we can discern those wishes. The Minister for Employment Relations, Industry and the Regions went to Strasbourg to plead with the European Parliament's Social Affairs Committee to support the amendments that our MEPs had proposed. His own MEPs avoided him like the plague and not only went on to vote against his wishes but led the whole Party of European Socialists to do the same. The British representation in Brussels even refused to advise British MEPs how to vote. It was a complete shambles. I have to say that, rather typically, the Liberal Democrats were, as we might expect, split. Our MEPs voted to protect British jobs. There is still a chance to correct the directive, and I hope that the Government and their allies in the European Union will take the opportunity to do so.

Mr. Mark Hendrick (Preston): It is seems strange, to say the least, that the right hon. Gentleman should complain about the non-completion of the single market in financial services when his own Conservative Government blocked many of the directives, more than five years ago, and when the City and the CBI are against many of the directives coming from Europe.

Mr. Ancram: We supported the outcome of the Lisbon summit and the Lisbon principles, and our MEPs have been pressing hard in the European Parliament for their implementation ever since.

Everyone wants enlargement to be a success. Most previous enlargements have been successful—we need only look at the economies of Spain and Portugal and compare them with how they were 20 years ago to see that. Many people have rightly pointed out that the

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number of these countries' nationals working in other European countries dropped after enlargement. That is an encouraging example, but there is also the warning of east Germany. The old East Germany has struggled since it united with West Germany and thus acceded to the EU, and its population has fallen. Among the reasons for it struggling is the weight of social regulation and rigid employment practices to which it has been subjected. Enlargement will succeed only if the EU moves to become less rigid and if it encourages flexible employment practices. More directives such as that on temporary workers to which I referred do nothing to help either the existing or the new members to build wealth and jobs.

In particular, I want to ask the Foreign Secretary about an announcement that he made yesterday on the free movement of workers. Why does he think it suitable for Britain not to have the transitional arrangements with the enlargement countries? Germany has secured the full seven-year transitional arrangements and every other major European economy has such arrangements in place. Why have we, in what is an overcrowded island, decided not to give those arrangements effect?

The Foreign Secretary has mentioned independent studies that justify the Government's position. [Interruption.] I hope that we find an opportunity during the debate to hear from the Minister for Europe, who spends more time talking from a sedentary position than from the Dispatch Box, some explanation of the Government's position.

Europe is also tied down by the failure to reform the common agricultural policy. There was a lot to be said for the CAP 40 years ago; now there is little. It has become to the EU what the Old Man of the Sea was to Sinbad—a parasitical burden that cannot be removed. The financial demands that enlargement has placed on the EU make the CAP unsustainable its current form, yet the Government have—

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